Market outlook for 25/01/10

Continuing losses by more than 1 per cent, the domestic market ended below the Thursday’s close tracking negative cues from the Asian markets on fears that China may further tighten its monetary policy. Large sell-off by foreign funds also contributed to the decline. Market extended losses also on subdued opening of European stocks. In addition, investors booked profit in several frontline stocks since morning. However, stocks were trying to recover and came off the day's low during mid trade, as according to the economic advisor of India's finance ministry, 9 per cent growth rate is seen for the next financial year. Nifty closed the day at 5,036.00 down by 58.15 points. Nifty January Future closed at 5,013.90, discount of 22.10 points.

• FII sold in index futures, index options and cash but bought in stock futures. (Net sell 3402 Crore)
• US markets closed deep in Red.
• Global cues are flat to Negative.
• SGX nifty is Negative as of now.
• Most Active January Nifty Call Option: 5200 and 5100.
• Most Active January Nifty Put Options: 5000 and 4900.

Over all view
As discussed earlier 5080 zone is really playing critical. We talked about that place in the post for 21st and low and high for 21st & 22nd were 5072 & 5074 respectively. There lies the pivot for recovery on the upside. The immediate trend is down and impulse moves are on the same side.
Supports: 4975 is immediate. Sustaining below that will be threat to break the 4940 support. Violation of 4940 can certainly bring 4860-4820/15 before any moderate bounce.
Resistance: 5080 is absolutely crucial. Sustaining above that Nifty can gain some upward momentum for the upside towards 5110/20-5165/80 and decide further movement.

NIFTY Technical
Current Spot: 5036.00
Pivot: 5023
3DEMA: 5100
7DEMA: 5161
20DEMA: 5179
RSI (7 days): 20.71
Supports: 4968 - 4900
Resistance: 5090 - 5145

Target Nifty
Buy Nifty above 5065 - 5105 - 5144 - 5185 SL - 5039
Sell Nifty below 4986 - 4954 - 4934 - 4920 SL - 5039
Buy Bank Nifty above 8856 - 8920 - 8983 - 9068 SL - 8920
Sell Bank Nifty below 8729 - 8676 - 8645 - 8622 SL - 8814

Stock Ideas for the Day
Reliance is in a short term down trend and has a stiff resistance at the levels of Rs 1,130 and has strong support at Rs 1,050 and thus in this dead cat bounce last weekend of the trading, one may see stock touching levels of Rs 1,097. However if this level is not attained, then share can fall to the levels of Rs 990 in the near-term.
It has strong support at Rs 1030 which is its 200-day moving average and if this level is not respected then stock can fall to the levels of Rs 900. Forecast for the stock in medium term remains that it is likely to move in a range of Rs 850-Rs 1,200. As a long term investor, exit all longs in this stock if the level of Rs 850 is broken on the lower side.

Reliance Industries: Buy above 1054 for targets of 1062, 1072, 1092 SL of 1031
Reliance Industries: Sell below 1031 for targets of 1022, 1013, 989 SL of 1054
Sabero Organics: Buy above 66.5 for targets of 68, 71 SL of 64 (1-2 Days)
GNFC: Buy above 124 for targets of 128, 132 SL of 120 (2-3 Days)
Financial Technologies: Sell below 1549 for targets of 1537, 1510 SL of 1576

Positional Call
Suraj Diamond: Buy above 49.6 for targets of 59 SL of 48 (1 Month)
JK Paper: Buy above 49.80 for targets of 56 SL of 48 (1 Week)

Market Timing is a wicked idea. Don’t try it ever - Ellis, Charles D

Use strict STOP LOSS in each and every trade in this kind of volatile market and Trade at your own risk.

Thanks and Regards

S&P Wealth Creators

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Disclaimer
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